05 Apr 2016

All About the Cloud

Today on the blog, we explain everything you need to know about the cloud, including deployment options, benefits, questions to ask during the selection process, and more. 

For many hedge funds, cloud technology offers several benefits that traditional on premise infrastructure systems do not, such as reduced capital expenditures, increased flexibility and scalability to meet changing business needs, and even enhanced security features. The shift from up-front capital expenditure associated with software licenses and hardware costs to the more controllable operational expenditures of monthly and annual contracts provides predictability from a financial perspective. It is important to remember, however, that not all clouds are created equally. When evaluating a move to the cloud, firms still hold several misconceptions, which can hold them back from pursuing a cloud strategy, or cause them to select the wrong cloud model.

When beginning an evaluation of cloud services, it is imperative to understand the distinctions between the different types of cloud. The type of cloud can impact how your data is segregated, where and what type of infrastructure is used, and built-in features, such as disaster recovery, backup, and intrusion detection. As a hedge fund, it is even more important to remain conscious of these factors due to the enhanced security and regulatory requirements relating to the data that your firm handles and generates.

Deployment Options: Public vs. Private Cloud

There are two main categories of cloud: public cloud and private cloud. Public clouds are provided through an outsourced provider and enable firms to pay a low monthly fee to access a shared hosting environment, making it more scalable and cost effective. Public clouds offer services at a lower rate, but, by offering less customization, users have less control over their data, and can feel that security is compromised.

Public clouds also offer far less insight into where and how data is segregated and stored. In comparison, the private cloud is a technology environment that can be built by an outsourced provider or internally, and enables firms to access their own private virtual data center.

Private clouds can be designed as single or multi-tenant.

The multi-tenant approach utilizes shared infrastructure between multiple firms or departments, but with segregation within the infrastructure components through a variety of methods, such as physical, logical, data, network, or performance segregation. This model offers an enhanced level of security as compared with a public cloud model.

In a single-tenant private cloud, the client is designed a separate, private piece of custom designed infrastructure where all the data will sit and not be shared by other firms. The downside of this, of course, is a more expensive solution, as additional dedicated hardware is required for each new customer. Software upgrades are more complex to deploy and scalability is limited by the hardware available.

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